28 August 2020
Brunei

Land code and amendments

Prior to the amendments to the Land Code (Amendment) Order 2016, foreigners and non-citizens were able to purchase land or property on trust. This was further re-emphasised by the Court of Appeal case Kheng Ah Beng v Hj Roney bin Hj Roslee @ Roni bin Hj Rosli [2009] Civil Appeal No. 9 of 2009. In this landmark case, the Court recognised ownership based on trust and equity whereby foreigners in Brunei has many of the same Land rights as prescribed to a Brunei National, particularly the right to own land.

As a consequence of the Court of Appeal decision, amendments were made to the Land Code. The specific amendments re-emphasised that ONLY Brunei citizens can own land or properties and in addition, the Act did not recognise any longer ownership by virtue of trust. This was embodied in the Land Code (Amendment) Order 2016 Section 32A:

  1. No –
    1. “Person shall, purchase or acquire any estate or interest in any land as a nominee with the intention that the person shall hold it on trust for another person; and”
    2. “Person shall authorise or appoint as his nominee any person to purchase or acquire any estate or interest in any land with the intention that such person shall hold it on trust for himself or another person.”

Though this Act was passed in 2016, it has not been effected or commenced.

Development of Strata

The Land Code (Strata) Chap. 189 Act was introduced in 2000. However, the Act did not generate enough interest amongst the general public as the submission of application was tremendously perplexing. In addition to that, awaiting decisions from the Land Department were also taking a long time as their processors at the Land Department were never introduced.

The Land Department has amplified further regarding Strata. It is now stated that due to the unfairness amongst the foreigners who plan to stay in Brunei for decades and is not able to own land or property, they are now authorised to own land through a strata-title, in which they will be allowed to hold the property for a period of time.

Strata benefits

Strata is beneficial to developers and investors as such the Government intends to provide aid to commercial component for new residentials under Strata title located within the Central Business Centre (“CBD”), Town Centre and potential business district. Another incentive to apply for Strata is that a Strata-titled deed can go up to 99 years maximum on lease. Lastly, the efficient use of land under compact developments will allow some commercial activities within residential development and the sales of the residential Strata unit.

To the public, fixed revenue is still ensured for original landowners while retaining the ownership of land and the processing time is shortened for transfers between buyer and owner of issued Strata titles.

Ultimately, the processes and procedures are transparent and revised, providing the lift of confidence needed for financial institutions to provide loan facilities as opposed to a non-strata development.

Application process for Strata-Titled Development (“STD”) for new private property development

Leasing of new private properties has been simplified under Strata. It is firstly determined by the proposal of the project i.e. whether the investment will gain approval before signage of contract and commencement of construction.

Subsequently, a qualified person must submit a planning permission application for development via E-KP and submit the building plan for approval. The Land and Survey Department will then issue and submit a process to approve for Land and Strata Lot.

Finally, construction work may commence after having obtained the permit to commence work from Board of Housing Developers (“BHD”) and pending the approval from Authority for Building Control and Construction Industry (“ABCi”). During the construction period, a qualified person will oversee and monitor overall construction progress for ABCi and Licensed Land Surveyors (“LLS”) will apply for Strata subdivision to the Department of Town and Country Planning (“TCP”) when the building structures have reached the rooftops. Once the Strata unit is completed, the ABCi will issue an occupation permit, the LLS will verify land boundary survey and strata survey after the TCP has approved the Strata subdivision.  The certification and approval of Strata plans will be done by Surveyors generals and Commissioner of Land (“COL”) in order for COL to issue final Strata Title to the individual owner.

Application process for the conversion of existing development to STD

Similar to the application process for a new private property, the conversion of an existing development to a strata-titled development begins with the proposal of the project. Whilst pending for approval, a qualified person must ensure land tenure is up to date and comply with the latest and relevant guidelines for Strata.

Following approval, the TCP will oversee the submission of planning submitted by a qualified person via E-KP. The procedure of upgrade may begin once the ABCi approves submission of building plan for upgrading approval by qualified person. The LLS will then submit Strata Lot and house number to the survey department and provide the sales agreement to owners. Qualified valuers must then submit unit entitlement to land for approval during this period.

The procedure for upgrade will commence once the qualified person obtains a permit to commence work from ABCi. In the course of construction, a qualified person will monitor the overall construction for ABCi and the LLS will apply for Strata subdivision to TCP. The ABCi will issue an occupation permit once the procedure of upgrade is completed. Following along the completion of upgrade,  the LLS will also have to verify land boundary for survey department and conduct strata survey after the TCP has approved the strata subdivision.  The approval and certification of Strata Plans will be provided by Surveyor General and Commissioner of Land (“COL”).  The COL will issue the Strata Title to the individual owner.

If you have any questions or require any additional information, please contact Mohamad Rozaiman Abdul Rahman of ZICO R.A.R (a member of ZICO Law).

This alert is for general information only and is not a substitute for legal advice.